Gold prices advance as stocks decline

Gulf Today Report

Gold rose on Tuesday as the commotion in Washington affected stocks and COVID-19 vaccination drive remains slow-paced.

Spot gold rose 0.3% at $1,849.91 and US gold futures were flat at $1,850.20.

Nicholas Frappell, global general manager at ABC Bullion said: "the macro picture is still positive for gold, so the market appears to be in dip-buying mode, but cautious about the scale of the dips."

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The 10-year Treasury yield is at 10-months highs, high bond yields raise the opportunity cost of holding the non-interest yielding gold.

"Gold looks underpriced at current levels. The new (virus) strain reminds us of the fact that 2021 may not be materially different from 2020 if the world doesn't get the vaccine fast enough," said Howie Lee, an economist at OCBC Bank.